iSuppli, which is known for its gadget component costs analysis, released a breakdown of the parts that make up the iPhone 4S. The most basic 16GB model carries a bill of materials worth £118. This total is a long way from the sale price of £499.

Earlier this year, ABC's ‘Nightline’ show went into the Chinese factories of Foxconn, where most of the world's Apple products - iPads, iPhones and Mac computers - are manufactured. The investigation revealed that workers earn just £1.12 an hour, work long hours and live in dorms with fellow employees.

Asymco analyst Horace Dediu used the ‘Nightline’ report to estimate that Apple pays labour costs of between £7.86 and £18.56 for every iPhone it makes, which represents just 2-4% of the iPhone's sale price.

So if the materials cost roughly £118, and Dediu has calculated that an additional £58 is spent on manufacturing its smartphone, (a cost that includes the labour costs, transportation, storage and warranty expenses) we reach a total of about £176 to manufacture an iPhone that retails at £499. This represents a profit for Apple of £323 per iPhone.

Even if they sell for £499, that is not what Apple charges for it. The operator puts on a nice margin for themselves. But yes, they have a nice profit margin for Apple, while still going like hotcakes.

From what I've heard, for an extra $50 usd, they could be making these in America and helping our economy and job market considering we buy the most apple stuff here but hey, whatever.

Back when Apple was widely being panned by critics for the Foxconn situation, lots of commentators were saying that they'd happily pay extra for a product that was made in the USA. Well, they had their chance with Google's Nexus Q; how did that work out?

And FWIW as of the last financials from Apple, the US accounted for around one-third of total sales.

Back when Apple was widely being panned by critics for the Foxconn situation, lots of commentators were saying that they'd happily pay extra for a product that was made in the USA. Well, they had their chance with Google's Nexus Q; how did that work out?

And FWIW as of the last financials from Apple, the US accounted for around one-third of total sales.

Let's be honest, the Q had other problems than its price and Made in USA label.

Even if they sell for £499, that is not what Apple charges for it. The operator puts on a nice margin for themselves.

Actually the operator subsidizes the price. Buying a "SIM-free" iPhone direct from Apple (as I did) is the most expensive way to buy one (in "money up front" terms). I paid £599 for my iPhone 4, direct from Apple.

Even if they sell for £499, that is not what Apple charges for it. The operator puts on a nice margin for themselves. But yes, they have a nice profit margin for Apple, while still going like hotcakes.

Actually, margins for resellers are extremely low on Apple products, which is why they almost never go on sale. The whole ecosystem of i-accessories is what they earn most of their money on.